Description/Context :
Addressing Inflationary Pressures:
Inflationary Yield Farming: While yield farming was a necessary tool to attract users and liquidity during the bear market, the current daily emissions have become inflationary. With too many tokens being distributed, the rewards are diluted, which reduces the perceived value of Sundae (SUNDAE). As more tokens enter circulation, the constant selling pressure from yield farmers results in price depreciation, which harms both current holders and potential investors. Reducing Emissions to Stabilize Value: By cutting back on daily emissions, we can reduce inflationary pressures on the token. This helps create a more attractive environment for long-term holders, investors, and stakeholders who are looking for price stability. Price stability is a key driver in attracting institutional investors and larger capital inflows.
Maturation of the Protocol:
Shifting Focus from Acquisition to Retention: SundaeSwap has matured as a protocol, and the days of aggressive incentives to attract liquidity should be behind us. Our next phase of growth should focus on building a sustainable, self-reinforcing ecosystem rather than inflating supply to attract short-term liquidity. By moving away from heavy yield farming emissions, we give new users and investors confidence in the long-term value of Sundae, as they know the protocol is focused on sustainability, not temporary rewards. Building Core Value: As the protocol matures, it’s essential to transition from growth at any cost to a model that emphasizes value creation. The user experience and liquidity depth are already strong, so the focus should now be on ensuring that SundaeSwap offers a stable, long-term platform with a healthy, growing token economy. Reducing emissions is a key step in signaling this shift toward sustainability.
Decreased Selling Pressure:
Selling Pressure from Yield Farmers: One of the biggest challenges in yield farming models is the constant selling pressure that occurs when liquidity providers harvest rewards and liquidate them to realize profits. This creates downward price pressure on the token and undermines its value. If we drastically reduce emissions, we reduce the volume of new tokens entering the market, which in turn decreases selling pressure and creates a more favorable environment for price appreciation. Long-Term Value Focus: By lowering emissions, we can incentivize long-term holding rather than short-term speculative behavior. This will help align the incentives of token holders with the long-term success of the protocol, encouraging a more stable price floor and minimizing volatility.
Creating a Positive Feedback Loop:
Attracting Investors Through Stability: A stable and appreciating token price is a magnet for investors. Reducing emissions will help maintain scarcity, which is a fundamental driver of value. As token holders see the price of Sundae increase, this creates a positive feedback loop: higher prices attract more investors, which strengthens liquidity, further stabilizes price, and builds investor confidence. Decreasing Emissions = Increased Scarcity: When fewer tokens are being distributed each day, the circulating supply decreases, which increases scarcity—one of the fundamental principles that drives value in any token ecosystem. Scarcity, coupled with growing demand, drives price appreciation, which ultimately benefits all users, liquidity providers, and investors.
Encouraging Value-Add Participation:
Quality over Quantity: With reduced emissions, the rewards for participation become more meaningful. Rather than being based on quantity of liquidity provided, the rewards will be tied more closely to long-term value creation and actual engagement with the protocol. This encourages users to become more than just liquidity providers; it incentivizes them to engage with the community, participate in governance, and support the growth of the ecosystem in more substantive ways.
Summary/Conclusion:
Reducing daily emissions is a necessary step toward the long-term health and stability of the SundaeSwap protocol. While yield farming served its purpose in the early stages by boosting liquidity and attracting users, the time has come to shift the focus toward value creation, price stability, and sustainable growth. By reducing emissions, we can decrease inflationary pressures, minimize selling pressure, and ultimately position SundaeSwap for greater price appreciation and long-term success. This will not only attract more investors but will also strengthen our community and ecosystem for years to come.
- Decrease daily yield farming emission rate by 90%
- Decrease daily yield farming emission rate by 75%
- Decrease daily yield farming emission rate by 50%
- Decrease daily yield farming emission rate by 25%
- Keep emission rate as is